Fortescue Invests A$21.9M in HyTerra, Boosting Nemaha Acreage to 60,000+ Acres

Strategic Investment and Board Strengthening

HyTerra Ltd (ASX: HYT), a pioneer in white hydrogen exploration, marked a pivotal moment in Q4 2024 by securing a substantial strategic investment from Fortescue Future Industries. Fortescue acquired a 39.66% interest in HyTerra through a A$21.9 million subscription at A$0.034 per share, a move that was overwhelmingly endorsed by shareholders at an Extraordinary General Meeting in December.

This partnership not only injects significant capital but also brings strategic expertise, with Fortescue’s Christine Nicolau joining HyTerra’s board as a Non-Executive Director. Nicolau’s extensive experience in corporate and joint venture portfolio management, particularly in critical minerals and energy sectors, is expected to bolster HyTerra’s governance and strategic direction.

Expanding the Nemaha Project Footprint

HyTerra’s flagship Nemaha Project in Kansas continues to gain momentum, with the company expanding its lease holdings to over 60,000 acres. This expansion is strategically targeted based on advanced geophysical data, including reprocessed seismic lines that highlight promising subsurface features associated with the Mid-Continent Rift System and the Nemaha Ridge structural high.

The Nemaha Project area is notable for historic wells reporting up to 92% hydrogen and 3% helium, underscoring the region’s potential as a prolific natural hydrogen and helium resource. The project’s proximity to established industrial hubs and existing infrastructure positions HyTerra advantageously to connect with multiple potential off-takers, including ammonia manufacturers and petrochemical plants.

Regulatory Approvals and Drilling Preparations

The Kansas Corporation Commission approved three additional well permits during the quarter, expanding HyTerra’s exploration prospects across Wabaunsee, Marshall, and Riley counties. Site preparation for the Blythe 13-20 well has commenced, located near the historic Scott-1 well which previously recorded significant hydrogen concentrations.

However, severe winter weather conditions have delayed drilling activities, with the company awaiting safer and more cost-effective conditions post-winter to commence operations. This cautious approach reflects prudent operational management amid challenging environmental factors.

Joint Development in Nebraska and Financial Position

Beyond Kansas, HyTerra holds a 16% interest in the Geneva Project in Nebraska through a Joint Development and Earn-In Agreement with Natural Hydrogen Energy LLC. While activities paused after a downhole pump failure in 2023, new management at NH2E has positioned the venture to reassess and potentially resume flow testing and exploration.

Financially, HyTerra ended the quarter with a robust cash position of A$20.4 million, bolstered by the Fortescue investment. Exploration expenditure continues to focus on leasing, geophysical surveys, and preparation for expanded drilling campaigns, reflecting a clear commitment to advancing the company’s resource base and commercial prospects.

Outlook for 2025 and Beyond

With a strengthened balance sheet, expanded acreage, and a strategic alliance with a major industry player, HyTerra is poised to accelerate its exploration and development activities in the natural hydrogen sector. The upcoming drilling campaign at Nemaha will be a critical test of the project’s resource potential and could set the stage for HyTerra’s emergence as a leader in the low-carbon hydrogen market.

As the global energy transition intensifies, HyTerra’s focus on white hydrogen, naturally occurring hydrogen with potentially lower production costs and emissions, positions it at the forefront of a nascent but rapidly evolving industry.